Ameren Corp (AEE) — Q3 2025 Earnings Call Transcript

Thank you, and good morning. On the call with me today are Marty Lyons, our Chairman, President, Chief Executive Officer; and Michael Moehn, our Senior Executive Vice President and Chief Financial Officer, along with other members of the Ameren Management Team. This call contains time-sensitive data that is accurate only as of the date of today's live broadcast and redistribution of this broadcast is prohibited. We have posted a presentation on the amereninvestors.com homepage that will be referenced by our speakers. As noted on Page 2 of the presentation, comments made during this conference call may contain statements about future expectations, plans, projections, financial performance and similar matters, which are commonly referred to as forward-looking statements. Please refer to the forward-looking statements section in the news release we issued yesterday as well as our SEC filings for more information about the various factors that could cause actual results to differ materially from those anticipated. Now here's Marty, who will start on Page 4.

Thanks, Andrew. Good morning, everyone. Before we get into the financials, I want to highlight the strategy that drives our actions and delivers strong long-term value for our customers, communities, and shareholders. Pursuant to this strategy, we've been investing in the electric and natural gas infrastructure of Missouri and Illinois to harden it and make it more reliable, resilient, and safer. And we've been adding new energy generation resources to meet the needs of our communities today and in the years to come. Because we are committed to providing a strong value proposition for our 2.5 million electric and 900,000 natural gas customers, we are also laser-focused on optimizing our operations to keep customer rates affordable. As we look ahead, the region and communities we serve are poised for significant economic growth, bringing investment, jobs, and tax revenue as well as necessitating incremental investment in utility infrastructure. To support this growth, we are actively engaging with stakeholders on economic development opportunities and to advance constructive regulatory frameworks designed to serve new large load customers and maintain just and reasonable rates for all customers. We're excited about the opportunities in front of us and believe the future is bright for Ameren and the communities we serve. Michael and I will dive into more details on the pages ahead. Now let's turn to Page 5 for a summary of our third quarter results. Yesterday, we announced third quarter 2025 adjusted earnings of $2.17 per share compared to adjusted earnings of $1.87 per share in the third quarter of 2024. Our recent FERC order provided guidance on ratemaking for net operating loss carryforwards. And as a result, we recorded a tax benefit of $0.18 in the third quarter of 2025. Given the nature of the tax benefit, we have excluded it from our adjusted third quarter 2025 earnings. The key drivers of our strong third quarter results are outlined on this page. As we move to Page 6, I'll cover how execution of our strategy has translated into tangible results for our stakeholders throughout this year. During the first 3 quarters of 2025, Ameren delivered on its commitments, deploying more than $3 billion in critical infrastructure upgrades for customers. For example, as part of our Ameren Missouri 2025 Smart Energy Plan, 11,300 electric distribution poles were replaced, 600 of which were upgraded to stronger composite poles. 300 smart switches were installed to reduce outages and speed restoration. 32 miles of subtransmission lines were hardened. 5 new or upgraded substations were energized and 55 miles of underground cable were replaced to strengthen system reliability. In Illinois, our customers are benefiting from the replacement of more than 8,500 stronger electric distribution poles, 8 miles of coupled steel gas distribution pipelines, and 13 miles of gas transmission pipelines for safety. Further, our transmission business placed in service 11 new or upgraded transmission substations and 40 miles of new or upgraded transmission lines to deliver energy more efficiently. These are just a few of the many projects completed through September. We also continue to execute on Ameren Missouri's preferred resource plan. As you know, we updated this plan in February to reflect the growing energy needs of our customers and communities, including during extreme weather conditions. The plan calls for the addition of approximately 10 gigawatts of generation capacity by 2035, including 3.7 gigawatts of natural gas generation, 4.2 gigawatts of renewables, and 1.4 gigawatts of battery storage. Through September, we've invested more than $825 million in new or existing generation resources and have requested CCNs from the Missouri Public Service Commission for 1.45 gigawatts of additional resources. In 2025, we also made the decision to spend more on operating and maintenance by accelerating certain tree trimming and energy center maintenance activities. All of these efforts underscore our commitment to delivering reliable energy for the long term. And as you know, our electric rates remain below both national and Midwest averages, a testament to our unwavering focus on continuous improvement and affordability. Now let's turn to Page 7. We have a long track record of strong and consistent earnings per share growth. As we look ahead, we expect this to continue. In February of this year, we updated our long-term earnings growth guidance, which included our expectation to grow earnings at a 6% to 8% compound annual rate from '25 through 2029 based off of our 2025 original guidance midpoint of $4.95. For 2025, we expect adjusted diluted earnings per share to be in the range of $4.90 to $5.10, up from our original guidance range of $4.85 to $5.05. We're well positioned to continue our long history of delivering above the midpoint of our original earnings guidance range. For 2026, we now expect diluted earnings per share to be in the range of $5.25 to $5.45. And we expect consistent earnings growth near the upper end of our 6% to 8% EPS compound annual growth rate range in 2027 through 2029. Consistent with prior years, we plan to update our long-term earnings growth guidance on our fourth quarter call in February 2026, including our 5-year capital and financing plans, which will reflect, among other things, firmed up capital estimates related to Ameren Missouri's preferred resource plan. Turning to Page 8. I'll provide an update on economic development activities in our region and associated sales growth expectations. We remain closely engaged with potential data center customers and are building a robust pipeline of large load opportunities that extend into the next decade. Data centers represent significant private investment opportunity for our states, bringing in thousands of jobs in fields such as construction, plumbing, electrical work, and technology as well as substantial tax revenue. As we discussed on our earnings call in August, data center developers continue to evaluate opportunities in Missouri, given the numerous desirable construction sites in our territory, available transmission capacity, and our ability to deliver power when needed at competitive rates. As a result of this engagement, Ameren Missouri's executed construction agreements with data center developers have expanded to 3 gigawatts, up from the previous total of 2.3 gigawatts. The developers of the data center sites with construction agreements in place have now made nonrefundable payments to us totaling $38 million to cover the necessary transmission upgrades and which demonstrates their confidence in and commitment to the proposed projects. We also continue to actively engage with potential data center customers to negotiate electric service agreements that are aligned with our proposed Missouri large load rate structure and, among other things, would establish anticipated minimum ramp schedules. I'll talk more about progress on that large load rate structure in a few minutes. As outlined in Ameren Missouri's preferred resource plan, we expect 1 gigawatt of new load from data center customers by the end of 2029 and a total of 1.5 gigawatts of new data center demand by the end of 2032. To give you a sense of the proportions, 1 gigawatt of new data center load by 2029 would represent approximately 5.5% compound annual Missouri sales growth from 2025. In addition, we're seeing notable expansion in the region's defense and geospatial intelligence ecosystem which is stimulating growth across multiple sectors, including advanced manufacturing. One such example is the opening of the National Geospatial-Intelligence Agency's new nearly $2 billion campus in St. Louis this September. The campus, which employs more than 3,000 people, represents the largest federal investment in St. Louis' history. Private sector participation is also strong with companies like Scale AI choosing to locate their headquarters downtown. The presence in St. Louis of federal and private sector geospatial operations, including advanced mapping, satellite imagery, and spatial analytics, strategically aligns with our region's strength in defense and defense tech industries. Looking ahead, Boeing has begun construction of new facilities to build the F-47 fighter approved earlier this year. Production of the F-47 is scheduled to start in 2026. These developments further strengthen St. Louis' position as a national hub for innovation and strategic investment. In Downstate Illinois, developers are also advancing data center projects with expected incremental energy demand totaling 850 megawatts. We have signed construction agreements with these developers and received payments to support the necessary transmission interconnections. Energy supply for these projects is expected to be provided through third-party supply agreements. We expect to provide an update on our Missouri and Illinois 5-year sales growth expectations in February. Moving now to Page 9. We provide an update on generation resources currently in progress at Ameren Missouri. We have procured long lead time components such as turbines and transformers for our planned energy centers with expected in-service dates through 2029. And we have secured production slots for the 3 turbines for our combined cycle energy center expected to be in service in 2031, remaining on track to deliver the dispatchable resources called for in our preferred resource plan. In August, we requested a certificate of convenience and necessity for the Reform Solar Energy Center, a planned 250-megawatt solar facility to be located adjacent to our existing Callaway Nuclear Energy Center. Generation projects with CCN requests pending before the Missouri Public Service Commission will support progress toward our goal of maintaining a balanced energy mix. We're targeting approximately 70% generation from on-demand resources and 30% from intermittent resources by 2040. Ameren Missouri's planned generation portfolio is expected to provide an estimated $1.5 billion in customer savings from tax credits through 2029, of which approximately $270 million has been realized so far in 2025. Building, maintaining, and operating a sufficient and optimal mix of energy centers to meet our customers' needs in an affordable manner is critical for our stakeholders, and I'm proud of the work our team is doing in those regards. On Page 10, we outline Ameren Missouri's proposed large load rate structure, which was filed with the Missouri PSC in May and updated in surrebuttal testimony earlier this week. In accordance with Missouri State law, any future large load data center customers would be required to pay for the cost to connect them to our system and for their share of ongoing cost of service. Under the proposed large load rate structure, we would deliver service under our existing large primary service base rate, which is currently approximately $0.06 per kilowatt hour, and customers would agree to additional terms and conditions as part of an electric service agreement. The additional terms would include a service commitment of 12 years after ramp, a minimum demand charge of 80% of contracted capacity, exit provisions, and credit and collateral requirements, all designed to protect existing customers. In addition, new customer programs would be available that would allow qualifying customers to advance their clean energy goals by supporting the carbon-free energy resource of their choice through incremental payments, which would help offset costs for other customers. This structure would offer a fair and competitive rate to large customers and maintain just and reasonable rates for all customers. While no deadline exists for Missouri PSC approval of our proposed large load rate structure, based on the existing procedural schedule, we would expect a decision by February of 2026. Moving now to Page 11 for an update on the long-range transmission planning process at MISO. Our focus remains on building the LRTP Tranche 1 and Tranche 2.1 projects that were assigned to us and developing strong proposals for Tranche 2.1 competitive projects. We are carefully evaluating each bidding opportunity, and we'll submit bids for projects when we believe we offer a clear advantage on project design, cost, and execution. As we have successfully done in the past, when it enhances the strength and competitiveness of our proposals, we expect to partner with other entities. For example, in August, we submitted a joint proposal with 3 other partners on a Tranche 2.1 competitive project in Wisconsin. We expect MISO to select the developer for this project in early 2026. The bidding and selection process for the 4 remaining Tranche 2.1 competitive projects will continue to take place over the remainder of this year and next. As a reminder, we do not include investment related to competitive projects in our 5-year plan until projects have been awarded to us. Further, MISO continues to analyze increasing energy demand and updated resource mix assumptions across the region as part of the futures redesign process. We expect this analysis will show the need for significant incremental transmission investments that would benefit the wider MISO region over time. MISO is expected to issue its report in early 2026. Moving now to Page 12. Looking ahead over the next decade, our pipeline of investment opportunities continues to grow, standing today at more than $68 billion. We will provide further details in February as to the planned capital investments expected for the period of 2026 through 2030 and the associated financing plan. These investments will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter, and cleaner and by powering economic growth in our communities. Turning to Page 13. In February, we updated our 5-year growth plan, which included our expectation of 6% to 8% compound annual earnings growth from 2025 through 2029. This earnings growth expectation is primarily driven by strong anticipated compound annual rate base growth of 9.2%, reflecting strategic allocation of infrastructure investment to strengthen the grid in each of our business segments and to build new energy resources to meet increased demand. We expect to deliver strong long-term earnings and dividend growth, resulting in an attractive total return. I'm confident in our ability to execute our investment plan and our broader strategy across all 4 of our business segments as we have a skilled and experienced team dedicated to achieving our growth objectives while keeping customers at the center of everything we do. Now before turning the call over to Michael, I'd like to briefly share a leadership update. Effective January 1, Michael will assume the role of Group President of Ameren Utilities, overseeing the operations of each of our business segments. Michael is an experienced leader, bringing to this newly created position, deep financial and broad operational expertise, qualities that will continue to support our focus on delivering value for customers and shareholders. When Michael transitions to this new role, Lenny Singh, currently Chairman and President of Ameren Illinois, will transition into the role of Executive Vice President and Chief Financial Officer. Lenny has nearly 35 years of utility leadership experience with substantial operational, regulatory, and profit and loss responsibilities. These experiences will ensure we continue to practice financial discipline aligned with our regulatory frameworks and deliver value for our customers and shareholders. I'm pleased with the strength and alignment of our leadership team and believe these changes position us well for continued execution of our strategy and strong performance. With that, I'll hand the call over to Michael.

Thanks, Marty, and good morning, everyone. Turning now to Page 15 of our presentation. Yesterday, we reported third quarter 2025 GAAP earnings of $2.35 per share, which included a tax benefit related to our Ameren Transmission segment. This tax benefit was recorded due to IRS guidance and a FERC order issued to another taxpayer regarding treatment of net operating loss carryforwards. Pursuant to this guidance, this quarter, we decreased income tax expense by $48 million or $0.18 per share. Excluding this benefit, third quarter 2025 adjusted earnings were $2.17 per share compared to adjusted earnings of $1.87 per share for the third quarter of 2024. The key factors that drove the $0.30 increase in adjusted earnings per share are highlighted by segment on Page 16 and reflect the important investments we've made to strengthen the energy grid across our service territory. In addition to benefiting from new electric service rates in Missouri and warmer-than-normal weather in July, we continue to experience strong sales growth within Ameren Missouri's service territory. In fact, total normalized Ameren Missouri retail sales over the trailing 12 months through September increased across all customer classes with an overall increase of approximately 1.5%. Further, in light of the benefit from weather this year and to support stronger reliability, we've increased energy center and discretionary tree trimming expenditures, the latter in targeted areas to address vegetation growth near our power lines. Moving to Page 17. Since 2013, we've delivered strong, consistent normalized adjusted earnings per share growth of greater than 7.5% compound annually. Yesterday, we increased our 2025 earnings per share guidance range of $4.90 to $5.10. The midpoint of the new range represents approximately 8% growth compared to both our original 2024 earnings guidance range midpoint and our 2024 results. Outlined on the page are select earnings considerations for the fourth quarter of 2025, which I encourage you to take into consideration as you develop your expectations for the balance of the year. And moving to Page 18, we provide detail on our 2026 earnings per share expectations, which we also announced yesterday. We expect our 2026 earnings per share to be in the range of $5.25 to $5.45, the midpoint of which represents 8.2% growth compared to our original 2025 earnings guidance midpoint of $4.95. Expected 2026 earnings details by segment compared to our 2025 expectations are highlighted on this page. Robust planned infrastructure investment, strong expected sales and economic growth, and strategic business process optimization opportunities give us confidence in our ability to grow earnings in 2026 and the years ahead. Now turning to our financing plan on Page 19. To support our strong credit ratings and maintain our balance sheet while we fund our investment plan, in February, we outlined a plan to issue approximately $600 million of common equity each year through 2029. We have fulfilled our equity needs for 2025 and 2026 through forward sales agreements that we expect to physically settle near the end of these years. Having utilized most of the capacity available under our existing equity sales distribution agreement, in August, we increased the program capacity by $1.25 billion to enable additional sales to support equity needs in 2027 and beyond. And in September, Ameren Illinois issued $350 million of 5.625% first mortgage bonds due 2055, completing our planned debt issuances for this year. We feel great about our financial position and the progress we've made in our financing plan. Turning to Page 20. I'll provide a brief update on ongoing regulatory proceedings in Illinois. Our Ameren Illinois natural gas distribution rate review is pending with the Illinois Commerce Commission, or ICC, and we expect a decision this month. As a reminder, we have requested a $135 million annual base rate increase. In October, the Administrative Law Judge, or ALJ, recommended an annual base rate increase of $91 million based on a 9.93% return on equity and a 50% common equity ratio. The difference is primarily driven by allowed ROE, the common equity ratio, and the treatment of other post-employment benefits. Following the ICC's decision, we expect rates to be effective in December. Turning to Page 21. Our 2024 annual reconciliation proceeding under the electric multiyear rate plan continues to progress. In September, the ICC staff revised its reconciliation adjustment recommendation to a $47 million increase compared to our updated request of $60 million, with the variance primarily driven by the treatment of other post-employment benefits. The ALJ recommendation and the reconciliation proceeding is expected later today. An ICC decision is expected by mid-December and rates reflecting the approved reconciliation adjustment will be effective by January 2026. Turning now to Page 22. Our strong performance so far this year has positioned us well to continue executing our strategic plan, which will drive superior value for all of our stakeholders. We continue to expect strong earnings per share growth to be driven by robust rate base growth, disciplined cost management, and a strong customer growth pipeline. Our strategy and team are well aligned and focused to ensure we capitalize on these opportunities for our customers and shareholders. We believe our growth will compare favorably with the growth of our peers. And further, Ameren shares continue to offer investors an attractive dividend. In total, we have an attractive total shareholder return story. That concludes our prepared remarks. We now invite your questions.

This is Diana Niles, actually on the call for Jeremy. So I was wondering with 3 gigawatts of signed data center construction agreements, would you foresee a need for future revisions to generation plans?

Yes, that's a great question. We are very excited about the expansion of our data centers that we have under construction agreements. Last quarter, we reported approximately 2.3 gigawatts, and now we have increased that to about 3 gigawatts. This increase gives us even greater confidence in the sales projections we shared earlier this year. You may remember that our integrated resource plan included an anticipated sales increase of about 1 gigawatt by 2029, reaching 1.5 gigawatts by 2032. As shown in our materials, the current generation plans we have will enable us to support up to 2 gigawatts of increased sales through 2032. Therefore, our 3 gigawatts of construction agreements strengthen our confidence in achieving our sales growth expectations. Over time, we will understand how these plans translate into actual ramp rates for the hyperscalers using these data centers. As you're aware, we are working towards finalizing a tariff with the Missouri Public Service Commission, after which we will enter into energy services agreements with the hyperscalers based on that tariff. These agreements will define the minimum ramp rates that the hyperscalers expect over time. We'll then assess how we align with the projections shown in our materials. It's important to note that our current generation plans allow us to serve more than 2 gigawatts beyond 2032. We'll need to evaluate the ramp rates over time and their implications for additional generation capacity. However, our existing generation expansion plans will enable us to support up to 2 gigawatts by 2032.

Yes. The only thing I might add to that is that as we go through '26, as Marty indicated, we'll have another opportunity to look at this IRP. We'll have an IRP filing probably in the fall, around September '26. So that's something to keep an eye on as well.

Congrats to Michael and Lenny on the new roles. Yes, absolutely. So I just wanted to ask, you're delivering on an 8% year-over-year growth off of 25%. And I hear you on the communication upper half of the earnings range. But just given you've had some companies kind of moving out to 7% to 9%, what's your view on just what puts you lower in that 6% range now? And could that be up for kind of consideration as we look towards the fourth quarter?

Nick, this is Marty. I'll start, and then Michael can certainly tag on. But you're right, the guidance we gave today, obviously, we're delivering earnings this year and projecting earnings next year that are in the top end of that range as we look to '27 to '29, continue to expect to be in the top end of that 6% to 8% earnings growth range. So we feel really good about the growth that we've been achieving and the growth that we project over the next several years. I think as we look ahead, we've got some important things that will really solidify our plans. The most notable one we just talked about in response to the last question, which is really getting the tariff approved by the Missouri Public Service Commission and getting these energy services agreements signed with the hyperscalers and really getting some better firmness, if you will, to the ramp rates and to the sales projections that we see between now and 2030. So when we roll around to February, obviously, we're going to update our sales growth expectations. We'll update our CapEx, our rate base growth expectations as well as our financing plans and update our growth guidance. So right now, I feel real good about the 6% to 8%, feel real good about delivering near the upper end of that growth range. And look, we won't constrain the growth. We're looking for economic development in all of the regions, the communities that we serve in Missouri and Illinois and certainly don't want to constrain that. And if that translates into greater investment opportunities and greater growth opportunities for us, certainly, we'll pivot with that.

Yes, not much to add there. I mean, as Marty said, I mean, you look at what we did here for '25, I mean, it's again, 8% off of '24. What we introduced for '26 is, again, 8.1% off of that $4.95 midpoint. And I think it's a fair question. As Marty said, we'll continue to evaluate it. I mean I think all of this is just consistent with the track record that we've had now for, what is it, 12, 13 years, 7.5% growth, and we'll continue to focus on delivering the upper half of that.

Understood. Not going to constrain the growth rate. All right. And then maybe just as we prepare for the fourth quarter update, maybe how are you framing balance sheet capacity to serve some of the load in CapEx? And just you've always kind of operated at an FFO level that is north of your peers. But I'm just curious, one, is the increased sales forecast a net benefit to cash flow and thus should equity needs to be lower? And then two, just any interest in using some balance sheet capacity relative to your minimums?

Yes, absolutely. All the sales growth contributes positively over time. We need to finalize the ramp schedules and timing, but I'm looking forward to it. We've discussed the tax credits that are being passed on to customers, which provide temporary benefits. We are starting from a position of strength, as you know. We're currently rated Baa1, BBB+, and Moody's downgrade threshold for us is at 17%, which we are operating above for 2025, maintaining a comfortable margin. We are committed to protecting our balance sheet and have been disciplined about raising the necessary equity over time. We have addressed all of our needs for 2025 and 2026 and are having positive discussions with the rating agencies regarding potential changes to the downgrade threshold. Although we are carefully managing our balance sheet, we are confident in our current position and will keep you updated as we approach the February call.

Maybe on the data center front, just with the construction agreements now at the 3 gigawatt level, is there anything you can share on that delta just in terms of how many customers that change is attributed to? And then I think there previously was an indication on the slides that you expected the ramp to begin in late 2026. Has that view changed at all? Just curious how we should think about that.

Yes, Carly, we're now expecting the ramps to start in 2027 instead of 2026. There has been a slight delay, but overall, it's not discouraging, especially with the 3 gigawatts of construction agreements we discussed. I believe there's one additional site that we’re considering, and these are significant locations that potential customers are eyeing. Overall, our development pipeline remains robust; we have a substantial number of sites under review. We mentioned last year that there are about 36 gigawatts of economic development opportunities across two states, roughly split evenly between Illinois and Missouri, with about 18 gigawatts in each. Notably, around 80% to 90% of these opportunities are data centers, mostly still in the early evaluation phases. In Missouri, aside from the 3 gigawatts of signed construction agreements, we also have another 2 gigawatts in advanced discussions for potential agreements. In Illinois, as I mentioned earlier, we have about 850 megawatts of large load with construction agreements as well. So, there has been good progress in both states. Did I address all your questions, Carly, or is there anything else?

No, that covered it. That's really helpful. And then maybe just a follow-up on Illinois, just with the Omnibus Energy bill passing over the last couple of weeks here. Just kind of curious your early views on any sort of implications for the business there.

Yes. We had a neutral stance on Senate Bill 25 that passed during the veto session, but I would like to highlight three key points, even though there are many aspects of the bill worth noting. First, it introduces an integrated resource planning process at the Illinois Commerce Commission, marking the first such planning effort in the state since 1997. This is encouraging as the state will approach integrated resource planning comprehensively, and I anticipate engagement from us as the ICC initiates this process in 2026. Secondly, there are concerns regarding resource adequacy statewide, combined with an emphasis on meeting the state's clean energy goals. Notably, the bill establishes an energy storage procurement process and empowers the Illinois Power Authority to enter long-term contracts for renewable energy. These initiatives will be implemented gradually and will include consumer protections outlined in the legislation. Lawmakers believe these measures will help lower capacity costs and manage volatility for consumers. Lastly, the bill promotes increased investment in energy efficiency, an area we are actively involved in. We expect our investment in energy efficiency on behalf of our customers to double to around $250 million annually. Although the return on investment will be adjusted to align with the rates granted in the multiyear rate plan, we have the potential to earn up to 200 basis points in incentives. We believe that with the required spending and achievements, we have a strong chance to earn additional incentives that will enhance our return on equity. Those are the three main points I wanted to emphasize, though there are other provisions in the bill as well.

It's Brian Russo, filling in for Julian. I wanted to follow up on the Clean and Grid Reliability Affordability Act in Illinois. Are there aspects of that bill that could lead to additional investments for the Ameren utilities, particularly in transmission and distribution, and possibly less so in storage? I would appreciate any specifics you could provide.

Yes, Brian, good question. I think the biggest opportunity is in the energy efficiency space, which we consider a regulatory asset. This means it receives rate base treatment. We expect investments in energy efficiency to double over time to about $250 million a year. However, that's the only notable aspect from an investment opportunity viewpoint.

Okay. Understood. And then also on the last earnings call, you had mentioned existing data center customers requesting more studies to pursue possible expansions. And I think there was about 1.7 gigawatts of existing customer expansion cited in some of the large tariff testimony. That's incremental to the 3 gigawatts. Is that correct?

Yes, it is. In relation to the 3 gigawatts of construction agreements, we still do not know what the ramp rates will be for the hyperscalers. Therefore, some of that growth might occur between now and 2030 or potentially later. We will have to wait and see. To answer your question, aside from the 3 gigawatts of signed construction agreements, there is an additional 2 gigawatts in very advanced discussions in Missouri, bringing the total to 5 gigawatts. Moreover, the overall pipeline of data center opportunities is considerably larger, with approximately 18 gigawatts of economic development opportunities available. There are many other sites for data center developers to consider and pursue. As we mentioned in the previous call, discussions with hyperscalers regarding energy services agreements related to this tariff are progressing well. These hyperscalers are also inquiring about expansion opportunities available after we sign these agreements and meet their initial requirements, and we have ample sites in our area of Missouri to support their needs.

It seems to me that you might be taking a conservative approach regarding the earnings. Once you update the numbers and gather more information, there may be potential for upside. Is that an accurate summary? Does that make sense?

I’ll start out. This is Marty. I think there's certainly upside, and we agree with that. We might always be a bit conservative, but we aim to provide you with accurate expectations based on what we know today. Our plan for sales growth includes projections of 1 gigawatt by 2029 and 1.5 gigawatts by 2032, reflecting the demand expectations central to our preferred resource plan. These projections are also embedded in our sales expectations. However, we still need to finalize the ESAs and clarify the ramp rates. Additionally, as we've mentioned, we can serve up to 2 gigawatts by 2032, as shown in the lighter green area. We also have construction agreements for up to 3 gigawatts of sites. So there is certainly upside in the plan, but what we’re providing today is what we believe to be the best guidance based on the current facts. Michael?

Yes. And look, we are providing, obviously, quite a bit of clarity today. I mean, I think the thing that's really missing is what Marty said, it's getting this large load tariff across the finish line, getting these ESA executed. And I think we can put a bit finer point in terms of the overall guidance. But we pointed to today is somewhere close to the upper end of that 6% to 8% off of this 26% that we just put out there at $535. So hopefully, that gives you a decent amount of visibility.

No, I think it does. Regarding the tax gain, it seems to be connected to a FERC order. I'm curious if there is a possibility for any changes to the rate base due to the IRS and the FERC order mentioned.

Yes, Paul, this is Michael. It's a small amount. What you're essentially doing is utilizing some net operating losses and establishing those as tax assets. This will provide some opportunities over time with a bit of rate base. I wouldn't classify it as a significant number. That's why we chose to exclude it from the GAAP earnings.

I was just wondering about the legislation you mentioned. It appears that the change in ROE seems like an improvement, although there are some execution issues. Am I right in thinking that? It sounds like this could potentially provide a boost. You've been executing fairly well, so any insights on that would be appreciated.

Yes. I view this situation as fairly neutral. I believe there are opportunities for incremental investment from an ROE perspective over time. We have a solid track record of execution as a company, and we intend to perform effectively on these energy efficiency programs for the benefit of our customers. That is what is expected of us. If we achieve that successfully, we will have the chance to earn the associated incentives. While there are opportunities, I see the overall effect on ROE as more neutral, with some worthwhile investment prospects. We will certainly aim to maximize the positive impact for our customers.

Yes. Just a couple of quick questions and clarifications here. First, how should we think of the $5 billion increase in your 10-year capital plan pipeline as we sit here today, is that back-end loaded? Or could we see the bulk of that in the '26 to '30 update?

David, it's Michael. We will provide you with more clarity on that around February. As you mentioned, there is a $5 billion increase. It's not just one factor; there are several elements contributing to this, including strengthening some of our generation, which is somewhat back-end loaded. Additionally, we're investing in the grid to enhance reliability and ensure our investments benefit customers. We cover a vast service area of 64,000 square miles with 1 million poles and thousands of substations. As we explore these opportunities over time, they all contribute positively to our capital plan. Technology also plays a role, as our investments in systems lead to further increases. While I can't pinpoint a single factor, we will certainly provide visibility as we move into February. There are significant opportunities in the overall pipeline.

Okay. And then just on the audio gap. Can you break that down by Missouri and Illinois?

David, you're back. We missed that question. Can you repeat it again? Sorry, we had a technical issue.

Sure. Can you break that down between Missouri and Illinois?

Yes. I think you're talking about sort of advanced discussions on the data centers. And when I talked about the 2 gigawatts of discussions that were sort of advanced, those were in Missouri. So we've got 3 gigawatts of signed construction agreements, another 2 gigawatts in advanced stages of discussion. If that didn't answer your question or you have more, why don't you repeat it again?

No, I think we're having a technical issue. Sorry about that. Noticing it elsewhere, too. But anyway, yes, that was the answer. It sounds like Missouri is the 2 gigawatts that were in advanced discussions. And then maybe just one quick one. Obviously, we've heard from some in the state of Missouri on new large load and affordability. Just maybe if you can elaborate on the regulatory and political engagement you have there and then touch on how those conversations might look in Illinois and your wires-only business.

Yes. So in Missouri, I would say the state is very supportive and encouraging of economic development and including data center development and data center attraction. And so the state certainly wants to realize those opportunities. Certainly, there are certain communities that have expressed concern around various things, water usage, noise, electricity rates and the like, things that have to be addressed as we go through the process of getting these data centers approved and built. And I think those concerns can and are being addressed. And of course, these data center opportunities bring with them, as we said earlier, tremendous investment, a lot of jobs, especially in construction trades as well as tax base over time, taxes for communities over time. So a lot of good economic development benefits associated with these data center opportunities. Of course, I think a concern as it relates to utility rates over time is just making sure that these data center developers, the hyperscalers pay for the cost to serve them, the cost to connect them to the system, to make sure that over time, they're paying a cost of service that reflects the cost to serve them and that there's no detriment to the rest of the utility customers that we and other service providers are serving. And that was actually one of the focuses of Senate Bill 4 earlier this year in Missouri, where, again, they embedded in that requirement that the Missouri Public Service Commission as they think about the tariff that would be approved to serve these to make sure that, again, there was reasonable assurance that the rest of the customers were not being harmed by these data centers. And so David, when we filed our tariff with the commission, and again, we outlined the components of that on Slide 10. It was really designed to make sure that we were designing the tariff and charging the hyperscalers a rate, which would be in accordance with Senate Bill 4 and the provisions that I just talked about. And I think that's been a concern of some of our elected officials just making sure that we weren't providing a discounted rate, that we were providing a rate that held the rest of our customers harmless that there weren't costs included in rates for our existing customers that were associated with service to these large load customers. So I think that's sort of the balance of concerns that are out there. But back to your point, overall, the state is very supportive and very desiring of these economic development opportunities. We're certainly working in concert with the state as well as economic development organizations across the state to bring the fruition in our service territory. And we're going to try to do this the right way, where we make sure that there are rewards that are brought to the communities that we serve in terms of the economic development opportunities and that from a rates perspective, these customers pay their fair share and the rest of our customers are not harmed by their usage.

Congratulations to Marty and Lenny on their new roles. Regarding the questions about Illinois legislation, I wanted to ask if there are any legislative priorities you are advancing or important topics that might come up during the bill prefiling in December, especially with some bills expected in Missouri.

Yes. Nothing to comment on specifically, Steve. I mean, obviously, we've continued to improve the environment there. I appreciate what the legislature has done. I mean the commission continues to be very thoughtful and forward-looking. I mean, trying to find ways to provide the right incentive for investment, but at the same time, continue to balance that with customer impact. So anything that would occur over the next couple of months, my sense is would be constructive and balanced, and we'll see what time brings. As you know, the prefiling is December 1. And so beyond that, it's probably a bit premature to get into the details.

All right. Well, thanks to everybody who joined us this morning. A lot of great questions, a lot of great dialogue. As you can tell, we remain absolutely focused on strong execution of our plan, and we will continue to do that for the remainder of this year and into next as we work to really diligently serve our customers and deliver safe, reliable, and affordable energy. So again, thank you all for joining us. I'm sure we'll see many of you at the upcoming EEI Financial Conference. And with that, have a great day and a great weekend.